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Transcript of Privcap Report - Amazon S3 ... 2016 Privcap LLC Privcap Report / Healthcare Game Change / Q1 2016

  • Privcap/ Report

    A collection of thought leadership, and of the people behind it, presented at Privcap’s first full-day healthcare event

    Healthcare Game Change 2015

  • © 2016 Privcap LLC

    Privcap/ Report


    David Snow Co-founder and CEO Gill Torren Co-founder and President

    Marketing & Sales

    Michelle Diller Director of Marketing & Events Doug Weber Sponsored Content


    Matthew Malone SVP Content & Digital Strategy Andrea Heisinger Editor Zoe Hughes Editor, PrivcapRE Rachel Lapidos Editorial Assistant

    Design & Production

    Gerson Lopez Production & Design Coordinator Nathan Pardee Video Production Manager Jake Hard Production Assistant Karolina Tarczynska Media & Marketing Coordinator


    Editorial David Snow / Matthew Malone / Zoe Hughes / Andrea Heisinger / Rachel Lapidos / Sponsorships & Sales Gill Torren / Doug Weber /

    For subscriptions, please call 855-PRIVCAP or email

    About Privcap

    Privcap is a digital media company that produces events and thought-leadership content for the global private capital markets.

    Privcap Report / Healthcare Game Change / Q1 2016 / 2

    David Snow CEO & Co-founder, Privcap

    Capturing an Ecosystem of Disruption

    When advances in healthcare occur, the positive impact is felt by an increasingly large ecosystem of beneficiaries.

    The most important are, of course, the patients, who receive quality care at a lower price. A new generation of fleet-footed and data-savvy providers also benefit, in that they win healthcare spend in a market hungry for innovation and consumer-driven business models.

    And in many cases, the capital partners to these providers are being rewarded with high returns. Evidence of this was repeatedly presented onstage at Privcap’s Healthcare Game Change event, which took place November 18 in New York.

    The most talked-about session of the event saw Dr. Jay Parkinson give an overview of his groundbreaking startup, Sherpaa, which connects patients with doctors through text messaging. During a panel discussion of LPs later in the day, Frank McEvoy of New York State Common Retirement Fund said his pension was an investor in a venture capital fund that backed Sherpaa.

    An innovative company that improves healthcare while also deliv- ering returns to retirees is exactly what our society needs more of, and is the kind of story that Privcap hopes to tell again and again.

    The content in this report tells many of those stories that were highlights of our conference, which drew more than 170 institutional investors, private equity managers, and healthcare innovators for conversations about the ways that capital and fresh ideas are revolutionizing the healthcare space.

    In a market too often characterized by plodding, incremental change and shareholder value being extracted through financial engineering, we hope to see more in the way of smart capital meeting smart innovation. And you can be sure Privcap will be there to cover all the players and their best ideas.

    Enjoy the report,

    David Snow @SnowsNotes

  • © 2016 Privcap LLC Privcap Report / Healthcare Game Change / Q1 2016 / 3

    In This Report 04
















    © 2016 Privcap LLC Privcap Report / Healthcare Game Change / Q1 2016 / 3

    The Keys to Successful Partnerships with Doctors Key thoughts from the Smart Deal Structures breakout session featuring The Riverside Company and Scott Perricelli.

    Why Data’s at the Center of Healthcare Disruption A panel discussion on the types of innovation needed to propel healthcare forward, featuring experts from Blue Wolf Capital, UAW, and The Cleveland Clinic.

    Why It’s Boom Times for Healthcare Deals Key thoughts from the Healthcare Deal Flow Dynamics breakout session featuring Robinson + Cole, FFL, and Vestar Capital.

    Precision Medicine’s Revolution A physician and venture partner, Dr. Joshua Bilenker, discusses his investment in Loxo Oncology and the nexus of medicine and investment.

    Data as a Healthcare Discrupter Dealing with data in the age of the ACA has driven consolidation among healthcare tech companies, says Jenner & Block’s Mark Harris.

    The 5 Things You Need to Know About Early Stage Healthcare Key thoughts from the Early Stage Healthcare Renaissance breakout session, featuring experts from Rosetium, New Leaf Venture Partners, and Oak HC/FT.

    Playing the Healthcare Evolution Experts from TPG, Bain, APAX, and Carlyle discuss the state of healthcare dealmaking.

    For Healthcare Savings, a Push to Cut Out the Middleman In this lunch keynote discussion, Sherpaa co-founder and chief medical officer, Dr. Jay Parkinson, explains how his company hopes to revolutionize consumer healthcare.

    What’s Motivating Healthcare Sales to PE? Consolidation has ramped up in some parts of the healthcare space, and the number of companies deciding to sell to PE players has also increased, says Les Levinson of Robinson+Cole.

    What You Need to Know Now: Pharma Key thoughts from the Pharma PE Opportunity breakout session, featuring experts from Great Point Partners, JLL Partners, and RSM.

    What LPs Want From Healthcare Representatives from Hamilton Lane, NYSCRF, and Helmsley Charitable Trust discuss how they invest in healthcare.

    The Big Takeaways on Big Data Key thoughts from the Investing in Diagnostic Tools and Devices breakout session, featuring experts from Quaker Partners, GTCR, and Jenner & Block.

    Monetizing Healthcare Real Estate Private equity has started to dabble in the real estate industry, seeing value in deals involving hospitals and the surrounding property

    Where the Smart Money is Investing in Emerging Markets Experts from BlackRock, The Abraaj Group, and Siguler Guff talk about where to find the best opportunities.

    Why a Hospital’s Pain is PE’s Gain Key thoughts from the Services, Facilities, and Out- patient Trends breakout session, featuring experts from New Found Health and Moss Adams.

    Investing in a Segmented Healthcare Market As healthcare strays from the traditional hospital setting, PE has an edge in finding deals amid high valuations, says RSM’s Tammy Hill.

  • © 2016 Privcap LLC

    Key Thoughts

    Physicians Fear Losing Control of Medical Decisions “The first thing every physician that we think about partnering with wants to know is, ‘Who’s going to control the clinical decisions? I don’t want you suits coming in and telling me how to treat patients.’” John McKernan, Riverside

    Doctors Must Buy Into Value-Creation Plans “The doctors we partner with are those who under- stand that they’ve gotten the business to a certain level, who see what we can bring as partners, and who are willing to partner with a private equity fund to help get a business to another level.” Scott Perricelli, LLR

    Partner With a Physician Who’s Ready to Let Go “We’ll overpay for a business where we’ve got a phy- sician-owner who says, ‘I woke up one day and I’m running a $20M business with a couple of hundred em- ployees, and I just want to get back to being a doctor. And what I want from you is to help me find a CEO.’” Scott Perricelli

    Infrastructure Often Needs an Upgrade “Compliance is key. That’s driven both by putting good compliance professionals in, but also putting good technology in that can serve the business. [Also] recruiting a physician and mid-levels and nurses, credentialing them, and making sure we have a good medical director that can instill the provider culture.” Scott Perricelli

    Scale Is Critical “Creating scale is critical. And when you can go into a provider organization and not only acquire similar providers but acquire to capture different pieces of the referral chain such that it’s all in-house, it can create a tremendous amount of value.” John McKernan

    Scott Perricelli, Partner, LLR Partners

    John McKernan, Vice President, The Riverside Company

    Partnering with a physician or other medical professional on a deal is different than working with more traditional entrepreneurs. Experts from The Riverside Company and LLR Partners explain the dynamics that make for a successful deal.

    The Keys to Successful Partnerships With Doctors

    Breakout: Smart Deal Structure

    Privcap Report / Healthcare Game Change / Q1 2016 / 4

  • © 2016 Privcap LLC Privcap Report / Healthcare Game Change / Q1 2016 / 5


    The American Diagnosis: Chronic Disruption / Keynote Panel

    Adam Blumenthal, Blue Wolf Capital: [Since] we’re talking about innovation, let me ask each of you to ask the other one, if you could innovate something in the next two years that you really need now, what would it be?

    Mary Beth Kuderik, UAW: What I would like the Cleveland Clinic to do is to apply all of the tools they have built and data they have collected around their focus on the patient toward nonprofits in a mission- driven way. Healthcare being very local, I can send people to Cleveland and the Cleveland members will

    Blue Wolf Capital’s Adam Blumenthal sat down with Mary